House rejects expatriate Obamacare bill

The House on Wednesday rejected a bipartisan bill that would have changed how expatriates and their insurance carriers comply with Obamacare, amid strong opposition from senior Democrats who said it created large loopholes in the health law.

The bill, H.R. 4414, fell 257-159. Republican leaders brought the bill to the floor under suspension of the rules, a procedure that requires support from two-thirds of members voting. It’s usually used for noncontroversial legislation, but opposition to this bill mounted all day, leading to its surprise defeat.

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If it were brought up again under a simple majority vote, it would most likely have enough votes to pass.

The proposal would have softened the health law’s rules for insurance companies who cover people who work outside of the United States, or for foreigners who live in the country. But several top Democrats urged members to oppose the bill amid concern that it defined “expatriates” so broadly that it would carve out big exemptions for health plans and the people they cover.

The bill was sponsored by Democratic Rep. John Carney of Delaware and Republican Rep. Devin Nunes of California.

The Obama administration had urged the House to postpone the vote to address concerns that the legislation could “undermine essential protections for American workers.”

There is bipartisan agreement that the health law may need some tweaks for insurers who offer plans to expatriates, citing the additional cost they have to operate outside of the country. But top Democrats — including Reps. Henry Waxman, Sander Levin, George Miller and Xavier Becerra — said this bill went way too far. They said it would create major loopholes to allow insurance companies to “avoid their responsibilities under the law and sell inferior insurance policies” in the United States, according to a letter they circulated to colleagues on Wednesday.

Bill sponsor Carney defended the legislation as fair to the American businesses. “Foreign plans don’t have to comply with the Affordable Care Act,” he said. Forcing U.S. expatriate insurance plans to comply with the Affordable Care Act gives their foreign competitors “a distinct advantage,” he said.

Critics said Carney stretched the definitions too far. Under the bill, any insurance plan for an American who is out of the country for 90 days or 15 trips or a foreigner working in the United States who is gone from his or her country for 90 days or 15 trips would be exempt from the Affordable Care Act. Their families would be exempt, too. That means they are exempt from all of it — from requiring young adults under age 26 to stay on a parents plans to the new mandatory coverage benefits. And the health plans wouldn’t have to pay ACA-related taxes and fees.

Labor and immigration groups, such as the AFL-CIO and the SEIU, oppose the bill, too. They say it would encourage companies to hire foreign workers instead of Americans, because they wouldn’t have to provide the same comprehensive coverage. The U.S. Chamber of Commerce supported the bill.

“This bill contains too many loopholes that amount to an extraordinary bailout for insurance companies,” Rep. Jim McDermott (D-Wash.) said on the House floor.

”This is a bill for an insurance company that is threatening to fire people in the district … in Delaware and a little small part of California,” Waxman said, referring to the districts of the two sponsors and the insurance company Cigna.

Cigna, which has operations in Delaware, did not respond to a request for comment.

Nunes and Carney pegged their legislation as a jobs bill and said it would save at least 1,000 jobs in their districts alone. They say that the health law now has incentives for companies to use foreign insurers because it is too costly for American companies to comply with it.

Nunes said the bill was drafted after “extensive discussions with the Obama administration.” While the administration was consulted and indicated that it’s open to adjusting the expatriate rules, it did not back this bill.